How the FTAA Affects You

How will the FTAA effect our daily lives?

What is the FTAA?

At the Summit of the Americas, held in Miami in December of 1994, heads of state from 34 countries agreed to construct the Free Trade Area of the Americas (FTAA). Since then, business and government representatives from all the countries in the Western Hemisphere except Cuba have been secretly drafting a plan to create the largest trading bloc in the world by 2005. Modeled on NAFTA and the World Trade Organization (WTO), the FTAA would extend from the most northern communities of Canada to the most southern settlements of Chile. If implemented, the FTAA would impact the lives of 800 million people throughout the Americas, yet few have heard of it, let alone have had a role in designing this commercial pact. While industry groups have direct input into the negotiating process, consumer, environmental, labor and other public interests groups are completely shut out of the meetings where the FTAA text is being crafted.

The FTAA will have a huge impact on people's everyday lives - on the food that we eat, the water that we drink, our children’s access to education, our healthcare and essential medicines, and our electricity. In the United States, 43 million people lack healthcare coverage, one in five children is growing up in poverty, small family farms and businesses are loosing out to multinational corporations, and two million people are incarcerated, many for nonviolent, poverty related crimes. The FTAA will likely increase economic inequality both within and between countries by concentrating wealth, promoting privatization of human and other essential services, and removing protections for small farmers and businesses.

Without strong environmental and human rights protections for workers, consumers, indigenous communities, people of color and the poor, the FTAA is bound to increase profits for multinational corporations without providing real benefits to society as a whole. That is why millions of people around the world are directly challenging the corporate agenda of free trade, privatization and deregulation while promoting environmentally sustainable, human-centered alternatives. The FTAA is neither necessary, nor inevitable. It can be stopped if enough people organize against it. First, we must get educated about the probable impacts. Here's what's at stake:

The FTAA will undermine public health and safety

Industry representatives are now using the FTAA trade talks as a platform for weakening or outright removing regulatory standards and policies that interfere with corporate profit making. A number of regulations that differ from country to country are being attacked under trade rules as “unnecessary barriers to trade” and “more burdensome than necessary.” Industry representatives are heavily involved in replacing country specific standards with new uniform global standards. This process, called “harmonization,” is a lot like asking the fox to guard the hen house. More often than not, standards are harmonized downward to the lowest level of safety rather than taking the highest level of precaution that most people would logically prefer.

Harmonization and other regulatory changes resulting from WTO and NAFTA agreements have already occurred in many areas that effect our daily life. These changes have had the effect of weakening standards regulating everything from pesticide residues on produce, to guidelines for truck safety inspections, to informational labeling on products. FTAA will accelerate the race to the bottom in public health and safety standards and open that race to the rest of the Western Hemisphere.

The FTAA, like NAFTA, will undermine the right to safe, healthy and sufficient food

NAFTA, which effectively increased trade in food products when tariffs (taxes on goods and services crossing borders) were reduced, does not require member countries to maintain minimum levels of food safety standards. For example, under NAFTA, meat and poultry imports that do not meet U.S. safety standards are imported and sold throughout the U.S. The increase of fruits and vegetables from Mexico under NAFTA actually coincided with severe cuts to Mexico's domestic food inspection budget. In 1992, Mexico's spending on food safety was $25 million US dollars, but by 1995, it had been slashed to $5 million. Similarly, cash strapped governments in the Americas are unlikely to spend much money on food safety and agricultural inspection. If the FTAA is modeled on NAFTA, these problems will intensify.

Increased produce trade with under-regulated countries in particular exposes consumers to a greater risk of eating contaminated or spoiled food. In 1998, Minnesota State health officials attributed a shigellosis outbreak that sickened 150 people in the Minneapolis-St. Paul area to parsley imported from Mexico. Shigellosis is caused by fecal contamination and is contagious. Imported Mexican parsley was also linked to outbreaks in three other states and two Canadian provinces.

Contamination of food is directly related to the health, hygiene and livings standards of agricultural workers. Throughout the years, NAFTA has done nothing to raise the standards of agricultural workers in Mexico, nor farm workers in U.S. or Canada which are largely migrants from Mexico who are often taken advantage of because they do not have legal immigration status. The FTAA will likely ignore, if not undermine the importance of improving worker health and safety, rights for immigrants and general well being as well.

The safety of our food is also being compromised because pesticides and agricultural chemicals banned in the U.S. are often marketed and sold to countries in the global south. Not only is it unethical to expose other countries' ecosystems and agricultural workers to these poisons, but to expand trade without food safety protections means that families end up eating imported food covered in toxic chemical residues.

ALTERNATIVE SOLUTION: COMMUNITY SUPPORTED AGRICULTURE

One key alternative to free trade-based agriculture is Community Supported Agriculture, a system that develops a strong local economy and regional food supply by connecting local farmers with local consumers. This alternative to agribusiness control of our food supply encourages land stewardship, fosters a sense of community, and helps honor the knowledge and experience of growers and producers working with small to medium farms. CSA is a unique model of local agriculture whose roots reach back 30 years to Japan where a group of women concerned about the increase in food imports and the corresponding decrease in the farming population initiated a direct growing and purchasing relationship between their group and local farms. This arrangement, called "teikei" in Japanese, translates to "putting the farmers' face on food." This concept traveled to Europe, was adapted by the U.S. and given the name "Community Supported Agriculture" at the Indian Line Farm in Massachusetts, in 1985. As of January 1999, there are over 1000 CSA farms across the US and Canada.

FREE TRADE UNDERMINES FOOD SECURITY

The United Nations defines food security as the ability of households, localities, regions, and nations to buy or grow food of sufficient quantity, variety and quality as to meet nutritional needs. For the last fifteen years, food security has been declining in Latin America. The World Bank and the International Monetary Fund require countries to shift from producing food for local consumption to producing export commodities, such as cut flowers and broccoli, in order to generate the hard currency needed for making interest payments on loans. These shifts in production, combined with the effects of cheap imports, have displaced millions of peasants off their land, forcing them to migrate to find work. The FTAA will expand on the World Bank/IMF policies and further destabilize agrarian societies, leading to increased hunger, unemployment and immigration.

Mexico and Haiti are just two examples of countries whose agricultural backbone of their economies have been devastated by free trade. In Mexico, over 38,000 small corn farmers lost their land when NAFTA simultaneously opened the gates to cheap U.S. corn and took away Mexico's safety net--the system of domestic price supports and subsidies that once ensured a profit for small growers. According to USDA estimates, a quarter of all the corn consumed in Mexico now comes from U.S. farms.

In his book, The Eyes of the Heart, Haitian President Jean-Bernard Aristide described the devastating effects of free trade policies advocated by the World Bank and the IMF. Until recently, Haitian farmers grew most of the rice, the main staple food, needed to feed the country and imported only a few thousand tons of rice. In the late 1980's, after Haiti complied with the IMF mandate to lift tariffs on imported rice, highly subsidized rice grown in the United States flooded into Haiti. During this period, roughly 40% of U.S. rice farmers profits came directly from the U.S. government in the form of direct subsidies. By 1986, Haiti was importing 196,000 tons of rice at the cost of $100 million per year. Haitian rice farmers were wiped out. Once the dependence on foreign rice was complete, import prices began to rise, leaving Haiti's population, particularly the urban poor, completely at the whim of rising grain prices.

ALTERNATIVE SOLUTION: FAIR TRADE CERTIFIED COFFEE

Fair Trade promotes social justice and sustainability by ensuring that producers and farmers receive a fair price for their product. Consumers in North America can now purchase fair-trade-certified coffee grown by farming cooperatives in Central and South America, the Caribbean, Africa and Asia. Through the fair trade system, these farmers have access to essential credit and receive a guaranteed, fair price of $1.26 per pound for their coffee, which triples their previous poverty level incomes. The communities are able to invest in health care, education, environmental stewardship, and economic independence. Fair trade is a humane and environmentally sustainable alternative to free trade and exemplifies the type of people-centered development strategies that could be enacted if multinational corporations were not dominating trade policy-making.

The FTAA will replace essential public services with corporate profit making schemes

The FTAA, structured after NAFTA and the WTO's General Agreement on Trade and Services (GATS), will likely promote further deregulation, hasten the intrusion of corporations into public functions like education, and facilitate the transfer of more and more government services from public ownership to private control. Once provided universally, essential services will be available only to those who can afford to pay. Given that negotiations are underway to further expand the reach of GATS, and that regional agreements like the FTAA must go further than the WTO agreements, there is every reason to be pessimistic about the outcome of the FTAA negotiations if liberalization in services are included.

The FTAA will lock in place the structural adjustment policies in Latin America promoted by the IMF and World Bank which have forced indebted developing countries to privatize essential public services such as water, electricity, and education.

In January 2000, the World Bank insisted that Bolivia privatize the water services in Cochabamba, Bolivia's third largest city, as a condition for receiving a loan to increase the available water supply. The contract went to a private consortium led by Bechtel, a transnational corporation headquartered in San Francisco. Local, cooperative water distribution systems were also banned. Water quickly became unaffordable as prices skyrocketed by as much as 200%. In response, an alliance of factory workers, farmers, students, environmentalists and peasants took to the streets in protest. Eight people were killed when the police fired on thousands of protesters. Finally, the President was forced to rescind the contract.

But the privatization agenda extends its reach to industrialized countries as well. This agenda is clearly set forth by the U.S. Coalition of Service Industries, which is pushing for privatization of services worldwide, declaring that they want "a contestable, competitive market." Their agenda is supported by corporate funded think tanks, which claim privatization yields cost reductions for consumers and taxpayers, increased efficiency, and higher quality of services.

Tell this to California ratepayers who, as a result of electricity deregulation, have seen their electricity rates skyrocket. In San Diego, electric bills increased by almost 300% when the cap on consumer rates was removed. In some cases, elderly people on fixed incomes had to turn off their refrigerators because they couldn't afford to pay their bills. Now rates on the market have increased so much that out-of-state aluminum and fertilizer companies can earn more profit by selling their cheap allocations of hydropower to California utilities at the inflated market rates than they normally earn from producing their products. Clearly, the major gains from privatization are increased corporate profits.

The U.S. trade negotiators are currently pressing for broadly defined energy services to be included in GATS, while the European Union wants the same for water services. The FTAA will be bound by the GATS because GATS is part of the WTO, and will be expected to go even further in deregulating and privatizing these services among others.

HEALTHCARE AND AFFORDABLE ESSENTIAL MEDICINES

The U.S. is the only industrialized country without some form of national health insurance. As a result, over 43 million people in the United States lack health coverage and those that are insured have major problems with the corporate managed system that dominates healthcare. Partly to promote the export of health services by U.S.-based corporations, the U.S. trade negotiators insisted that the WTO agreements cover services, resulting in the GATS. With corporations like CIGNA and Aetna already skimming the cream by providing health services to those who can afford it in Latin American countries, the U.S. negotiators will no doubt press hard for FTAA rules that expand the healthcare market and protect the profits of these and similar corporations.

Pharmaceutical companies are also benefiting from NAFTA and the WTO agreements, which use rules on intellectual property and patents to make it easier for these corporations to control the price and distribution of drugs, preventing people from obtaining affordable essential medicines. Under NAFTA, intellectual property rights give a corporation with a patent in one country the monopoly rights to market the item throughout the region. These rules are enforced with cash fines and criminal penalties, making them even stricter than the WTO rules which require member countries to provide 20 year patents on pharmaceutical products. Through the FTAA, U.S. negotiators are now trying to expand NAFTA's corporate protectionism rules on patents throughout the Western Hemisphere.

Pharmaceutical companies such as Merck and Pfizer have used these rules to quash compulsory licensing mechanisms, which allow patented drugs to be manufactured in another country in exchange for a “renting” fee. This monopolistic control allows pharmaceutical corporations to keep drug prices high and blocks production of generic versions of life-saving drugs, which spells disaster for the poor who cant afford anything else. If modeled on NAFTA, the FTAA intellectual property rules will likely undermine the ability for countries like Brazil, which has a federal policy of providing free, locally-manufactured HIV drugs to its citizens, to respond to health crises such as the AIDS epidemic. The NAFTA rules also allow companies to "bioprospect" and patent indigenous medicines that are considered "traditional knowledge.” This is effectively robbing indigenous people of their cultural heritage. In response to problems with bioprospecting, the indigenous communities in Southern Mexico declared Chiapas a "bio-piracy free zone" and are refusing to allow biotech researchers to enter their territory.

CORPORATE CONTROL OF EDUCATION

Corporations have already made major inroads into the U.S. educational system. High schools are contracting with private businesses for guidance counselors; textbooks are using corporate logos in their exercises; Zap Me! Inc. was offering schools free computer equipment in return for displaying a constant stream of advertisements on the screens; and Coca Cola made a deal with Colorado Springs schools to provide $8.4 million in funding over 10 years in exchange for the schools contracting to sell 70,000 cases of Coke products to students every year. Privatization of primary and secondary education will also continue with school vouchers and charter schools. The same is true at the University level were corporations now fund university chairs, departments, and research. The right to free, public education is also being eroded in countries around the world. In Mexico and Nicaragua, attempts to undermine the constitutional right to free higher education were met by massive student protests in the last few years.

NAFTA’s rules on services exclude local government policies, but not government services in general, while GATS covers local government policies and offers no protection for local government services like public education. The FTAA will have to be at least as comprehensive as GATS which does not bode well for protecting public education given that transnational corporations view education not as a public good, but as a multi-billion dollar industry waiting to be exploited for profit.

ALTERNATIVE SOLUTION: EXCLUDE ESSENTIAL PUBLIC SERVICES AND PATENTS ON LIFE!

The corporate agenda of privatization and deregulation both at home and abroad conflicts directly with the fundamental responsibility of governments, as codified in the UN Declaration of Human Rights and many national constitutions, to provide basic services such as healthcare, education, clean water and electricity for all its people. Such essential services should be excluded from trade and investment agreements, which are being crafted to promote the profit making goals of multinational corporations. Further, trade agreements should not recognize patents on indigenous knowledge or interfere with the provision of affordable medicine through unreasonable patenting requirements.